Scotiabank Will Pay Over $127 Fine to Settle CFTC Charges

Bank of Nova Scotia or Scotiabank has agreed to pay $127.4 million to settle the US CFTC charges for involving in spoofing gold and silver futures contracts and making false statements.

20 August 2020 | AtoZ MarketsBank of Nova Scotia (BNS) is a Canadian multinational bank and financial services company. It is one of Canada’s largest banks in terms of deposit balance and market capitalization. It also offers products and services, including retail and commercial banks, wealth management, and corporate and investment banks. Moreover, it has over 88,000 employees.

Scotiabank Reaches Settlement Agreement With CFTC and Justice Department

Bank of Nova Scotia operating as Scotiabank has reached an agreement with the US Department of Justice and the Commodity Futures Trading Commission (CFTC) to settle metals market manipulation charges. Moreover, Scotiabank will pay a total of $127.5 million fine to the Department of Justice, and the CFTC.

US regulator alleged that between January 2008 and July 2016, four precious metal traders employed in Scotia, New York, London, and Hong Kong made fake trades. Those trades intended to manipulate the prices of gold and silver futures contracts.

“Between August 2013 and February 2016, three Scotiabank compliance officers possessed information regarding unlawful trading by one of the traders. But failed to prevent further unlawful conduct by this same trader,” the Department said.

According to the regulator, BNS has tried to manipulate and spoof gold and silver futures contracts on thousands of occasions over eight years. So, it was fined $77.4 million for these operations and deceptive acts. Spoofing is an act of price manipulation by making a false perception of the supply and demand situation surrounding the product.

Scotiabank agree to co-operate on ongoing investigations and prosecutions related to the matter. It also agrees to retain an independent compliance monitor for three years. “We understand that in order to maintain the trust of our stakeholders. We must adhere to trading-related regulatory requirements and compliance policies.” the bank said.

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